The Vita Coco Company, Inc. (COCO) Earnings Call Transcript & Summary

A fast-growing plant-based functional hydration platform, a pioneered packaged coconut water, and it's extended the brand and entered other healthy hydration categories over time. The portfolio is led by Vita Coco, the top brand in coconut water. Coconut water is being complemented by extending the brand into other formats like coconut milk, barista milk, for cream in coffee, Vita Coco Spiked, which we'll have a little fun with here and new platforms like PWR LIFT. Joining us today is Co-Founder and Executive Chairman, Mike Kirban. Mike, thanks for spending some time with us today.

Thanks for having me.

So maybe just to get started for people who may be not familiar with the company, can you give us just kind of a quick synopsis of how you got started, kind of what the motivation was to launch this?

Yes, it started in a bar in Lower East Side of Manhattan back in a cold February night in 2003. I was at a bar with one of my best friends, met two Brazilian women. He fell in love with one of them, moved to Brazil several weeks later and realized when he got there, he needed a job and didn't speak the language. I went down to visit shortly thereafter. Coconut water was exploding in Brazil. It was not only on the beach in a coconut anymore, it was now in a tetra pack, in people's refrigerators. This was a category that was on fire at the time in Brazil. And we said, look, let's see if we can create our own brand and see if we could bring this category that is so prevalent in Brazil and the rest of the tropical world to North America and Europe and so on. So we started the business, and we think that here we are 19 years later in the still very early days of building a category that one day will rival cranberry juice and then orange juice and so on and so forth.

It kind of leads into the next question, which is, one of the things that really strikes me about the company is how you've iterated, right? And it's a dynamic market, the beverage market, for sure. You've brought outsiders in to help run the business. You had to evolve The Vita Coco brand. So you could talk a little bit about the current strategy, how it's evolved and kind of how it's going to evolve or iterate going forward.

Okay. Yes, as we built the category, again, it didn't exist. So we had to build not only a brand like any other consumer good brand that starts from nothing, we had to build a category. We had to educate consumers on what coconut water is, when to drink it, what occasions to use it in. So that was a process. And we started in Lower Manhattan and Brooklyn and then expanded to Boston and then expanded to L.A. And then soon enough, we were in London, and we were in Seoul, and we were in Beijing and continued to build out this category. And as we built it out, I would say, from 2004 or '05 when we really started through 2017, it was just high growth and it was just push. I had no consumer goods experience whatsoever, no real beverage experience at all. And the team around me was just high energy, go and execute and crush it, and we'll build the business that way. And that was great. It got us to a couple of hundred million dollars in revenue. We then hit a wall. We realized in like 2017 into 2018 that if we were going to compete with the big beverage behemoths that control the beverage industry today, we'd have to professionalize our organization. So that brings up, I think, the point that you mentioned. We've hired talent -- I've hired talent around me to the point where today, I brought in, in 2019, Martin Roper, who was the CEO of Boston Beer for 18 years. Worked in a similar situation with a very active founder in Jim Koch and really operated the business. And together with Martin, we've totally professionalized the organization. We built the sales organization from scratch, partnered with KDP and our other distribution partners in a really meaningful way. And we think that today, we're positioned -- and we went public, obviously, in October of '21. We think today, we're finally in a position that we can take this real strong infrastructure that we've built and this foundation that we've built and start to really expand off of it.

And I think when you go back to that time frame before you brought Martin in, the category had slowed, right? And I think from our perspective, some of that was as the category leader maybe the company wasn't doing enough to drive a category, whether that's spending in marketing or innovation. So is that an accurate insight, like the category is growing now, but it seems like that's because you're growing it.

Yes. No. I mean two things happened. One, we were and remain the category leader. We have 50-plus share of the total category. We have -- we also do most of the private label in the category. So we are really the clear category leader. So if we're not driving the category and we're not doing things right, and if we catch a little cold, the category gets sick. And that's what happened in 2018, 2019. But at the same time, I would say, in 2017, Coke and Pepsi, who were also playing in the category and were helping us grow the category, kind of gave up on the category and started to pull out. They realized that the supply chain was very complicated for them. It wasn't in their wheelhouse. Now they're the best at supply chain, right? And they should be the best and you would think that. But when it comes to climbing trees and cracking coconuts in the tropical world, it wasn't where they wanted to spend their focus. And that enabled us to continue to grow the category, but without their help. So all of this happened at around the same time.

Just want to make sure if anybody has any questions from the audience, just feel free to chime in. Actually, we've got one in the back. Hang on, do we have a mic.

Can you touch upon like you mentioned that coconut water as a whole was kind of slowing for a while, and that was likely of course because you guys were slowing. Can you maybe just talk about category growth looking forward? And maybe can you get around the "negative stigmatism" around juice, kind of all the different negative sentiments around that.

Would you like me to repeat the question?

Yes. So we'll take these as, I think, two separate questions. One is the category slowed, it's now in growth. Why do we think it will continue to grow, right? And the category will continue to grow. And I think the other one is, is it a juice and how do you get away from that stigma of juice potentially being negative, whatever it might be. So let's take the first part of the question. The category, yes, it did slow in '17, '18. Started to really turn around again as we fixed things in the back half of '19. During that period we're talking about, we lost a lot of our major retailers. Like that's how bad it got. We weren't doing any category management. We weren't in the retailer's offices. We had one guy running all of national accounts and calling on all of our retailers at the same time and that's not the way to build a beverage business. So that had to be fixed and we had to reorganize our entire sales function. At the same time, the category has picked up growth. And if you look at it actually on a 3-year stack, our business, The Vita Coco branded coconut water business is up 100%. It's a 3-year [ clock ]. And that is from adding a nice combination of adding new households and adding -- and current consumers drinking more. At the same time, the majority of the households that we've added in the past 3 years are some of the fastest-growing demographics in the United States. This brand that started out in yoga studios and gyms, catering mostly to white females, has slowly grown and expanded its demographics to the point where today, more than half of our consumers are nonwhite. We way overindex with urban -- young urban consumers who are mainly Hispanic, Asian and black consumers. And these are some of the fastest-growing demographics in the U.S. at the same time. So we think that we will continue to give consumers new occasions to drink the product. So not just in the yoga studio and the gym anymore, it's now in smoothies, in the breakfast occasion, it's pre and post workout. It is -- for the last several years, it's been -- become a big hangover or recovery cure. And now we're really focusing on alcohol and being able to use coconut water as a mixer and in a ready-to-drink product like this partnership we did with Diageo. So it's new occasions, bringing in new consumers to the category. We don't see why this category can't be, like I said, coconut water has a 20% household penetration, cranberry juice has a 45%, 50% household penetration, Orange juice has 75% household penetration. We're in the early days, and we feel that we can get there.

I have a question for you. Obviously, you know a lot about your company, but I learned a lot about you when you did this podcast, How I Built This. And you, long drive to Florida, and I was listening to you.

You shouldn't fall asleep while you're driving.

No, you're very entertaining, but you were really, really talking about competition, how you were like basically fighting with competition nonstop, right? You've obviously kind of gone over that hump to a certain degree, but obviously, there's a lot of brands out there. So how are you positioned, a, from a supply chain perspective relative to them? And you mentioned the Cokes and Pepsis of the world kind of abandoned the category to a certain degree. But I'm talking about the more niche plays. How are you differentiating yourself from a supply chain perspective? And then from a taste perspective because obviously not all coconuts are created equal, depending on how you source it.

Yes. No, I think our supply chain is by far our biggest, biggest competitive advantage. We created a supply chain that is literally -- we dug a moat around our business, and we've made it very hard for anybody, even Coke and Pepsi, to scale in this category. And we can talk about it as we go or we can get into details. But basically, we have these long-term exclusive supply contracts with most of the world's largest procurers of food-grade coconuts. So the fact that we're not just buying coconut water on the open market, we're using a byproduct from the coconut industry, which produces coconut milk, shredded coconut, desiccated coconut, carbon fiber, all of these things. We're using a byproduct, and we have the exclusive rights to that byproduct. That's the big competitive advantage. And over the years, in terms of taste, you're right, we're producing in, I guess, 7 countries, from Brazil to Sri Lanka to Philippines and Thailand and Malaysia. There are different breeds of coconuts. The closer you get to the ocean, there's different sodium contents and everything else in the soil that makes the sodium and the coconut water different. All of these things change the taste. So over the years, one of our, I think, biggest advantages is we've gotten really good at blending different breeds, different ages to create consistent taste across the portfolio. So I would say, today, I'm one of the very few people that can buy a Vita Coco and without looking at it tell you where it came from. Most people can't do that. So I have one skill, which is very proud of. So I think that's part -- we have 40-something people that sit in our Singapore office that run the procurement of the coconut water out of there. We test every batch. Taste and sensory testing, all of these things. So that's part of the process. That I think -- and that's why we do all the - we do such a large percentage of private label also. Nobody else can offer the scale, the price and definitely not the quality that we can offer.

So maybe to pick up on that point, the last few years of really stress-tested supply chains, including yours. We can talk about ocean freight or we can just decide not to talk about it, but could you talk a little bit about just what you learned and like how your supply chain maybe is different going forward than it was before the pandemic and everything that's gone on in the last couple of years.

Yes. I think as most of you know, especially people who we spoke with today in detail and who have listened to our earnings calls and so on and so forth, unlike a lot of consumer goods companies that have seen massive cost inflation across the board in terms of ingredients and packaging, everything else and supply chain-related things, we really almost -- the vast majority of our cost increases have been in logistics and supply chain, mainly logistics. Remember, because the product is -- the raw material that we use was and is a byproduct. So as we think about the business, and we've talked about this in quite detail, there's about $67 million that got pulled out of the business on a rate per case basis from 2020 to 2022. So if we had sold the same number of cases in '22 that we -- if we had sold the same number of cases in 2020 that we sold in 2022, we would have had $67 million more on the bottom line or to do whatever we wanted with. Now that cost inflation was mainly ocean freight and some domestic logistics and so on and so forth. That's all started to normalize. So now we've gone from a position where if you would have told me 2 years ago that we would have seen that type of cost increases on ocean freight, I would have told you we'd be out of business. Instead, we were able to do $20 million in EBITDA last year, grow the business and continue to grow our cash position. And instead today, with that all reversing and normalizing and coming back to 2019 levels, we're playing offense. Like we're putting significant dollars to the bottom line. I think EBITDA growth more than in terms of a percentage basis than I think anybody -- I would think anybody out there basically, while at the same time, having all this increased gross margin that we can also reinvest in growth, not only for this year but for '24, '25, '26, '27, start to further develop our innovations and really start to, like I said, get on offense and continue to grow this already high-growth business even faster while pouring money to the bottom line. It's a very unique position to be in and something I'm really excited about.

While we're talking about supply chain, you've got a -- you're an important sort of constituent in the communities that you're sourcing from. So could you talk a little bit about the efforts you make in places like the Philippines and Brazil and just how that sort of relates to the kind of the ethos of the company?

Yes. I think this is, for me, one of the most satisfying parts of my business. We started this business as a side project in Brazil to sell in Brooklyn and make a couple of extra dollars and see if there was anybody willing to buy coconut water. We didn't set out to create a philanthropic business or an impact business, but it's really become that. We -- on our first trip to the Philippines, I remember seeing kids going to school in the mud under a tarp. And they were sitting in the mud under a tarp with somebody in front of them and I asked what is that in that school. Since then, we've built 35 schools in the Philippines. We have these farmer training programs that -- you asked about the supply chain and the coconuts. There's a lot of talk about the fact that a lot of the coconut trees that got planted, specifically in the Philippines after World War II, which is when this industry really started to take off in Southeast Asia, are now getting old and they're getting senile. And so these small family farmers were not buying from plantations. There are no plantations because of land reform. We're buying from thousands upon thousands of small family farmers. The guy -- the kid and the family who climbs the coconut trees and gets the coconuts, they were getting -- their grandparents were getting 200 coconuts off of a tree each year. They're now getting 40, 50, and so they started cutting down these trees for lumber because the lumber was now more valuable than the 30 or 40 or 50 coconuts. So we've now transformed those communities, taught them, we brought them seedlings, better producing coconut trees, started planting seedlings 5, 6, 7, 8 years ago that are now harvesting 200 coconuts. And so we've transformed the livelihood of these families from making $1,500 a year to making $15,000 a year while their kids are now going to school in really nice facilities with solar panels that they can actually generate electricity and power tablets and all of these other things. So it's this really nice ecosystem where we're buying this raw material, giving them a route to market for this raw material that they didn't have before in the Western world and, at the same time, helping them become better and which in turn helps us become -- get more coconuts and get more access to coconuts, but consumers love it. It's a great retention tool and recruiting tool for employees and all of these other things while having such an impact. So it's something that I've become really interested and I enjoy.

Maybe to flip a little bit, we'll talk about going on offense. And maybe we can start with in coconut water multipacks. And we've talked a bit about this offline. So maybe just kind of frame that for us, what the opportunity is, what you think that might imply for on the base, Vita Coco, coconut water, just like the incremental growth you might see from that.

Yes. Again, not to scare any potential investors or investors. But like I said, I had no beverage experience. I had no consumer goods experience coming into this, right? So it's taken me a long time to learn how the beverage industry works, and what I figured out is growth through multipacks is a key component of building a big beverage company. Two years ago, you go to a Kroger or whatever else, there's 4, 5 or 6 facings of Vita Coco. That's it. It's the single-serve 500 mL and maybe a 1 liter. And over the last couple of years, we started introducing 4 packs and then flavored 4 packs and then 4 packs of 1 liters. And now this year, the 12-pack, 330 mL. And what we're seeing is that is a real driver of growth, not only volume growth but it's a driver of, I think, new households or new consumers within households as you're getting -- instead of whoever is doing the shopping, buying 3 or 4 units, they're buying 12. They're in the fridge. More members of the house are drinking them. They're using them in more occasions and they're just consuming more. So this is how you grow a beverage company. And it's not only because you're getting more product in the house, but the billboard is getting bigger on shelf. So now you walk down the beverage aisle, instead of missing those 4 facings of Vita Coco, you're now seeing 16, 18, 20 facings of Vita Coco. And that's kind of the beauty of it. Creating that billboard creates more awareness and brings more people into the category.

And just retailer receptivity, it's easier to pack, easier to stack. Just how have retailers responded to it?

I mean retailers love it. You try to stack a bunch of tetra packs on top of each other with those little plastic caps, it's not the easiest thing in the world. So from a display activity standpoint, you're getting more display activity. Again, that billboard is great, and they're just selling more volume. And so when a brand is doing well like we are, I mean we're one of the fastest growing -- I think if you take Celsius out of the mix, I don't think there's anything growing volume faster than us in the beverage aisle. On a scan basis, at least, if you look at the last period, and definitely, as you look at a 2- and 3-year stack. So we're in a very unique position to go to retailers and ask for more and more space. And this is the Ocean Spray strategy that I was talking about, and I continue to talk about and I'm fascinated by, is these guys have a raw material, the cranberry. They've created a moat, a supply chain advantage around the cranberry. We've done the same thing on the coconut. And we actually have better velocity per point of distribution at retail than they do, but they have every size, shape, format, flavor, everything else, and they just built this depth of distribution at retail that is so impressive, and that's what we're going for.

Better remind anybody has a question, just feel free to chime in. So maybe if we think about adjacencies, right, and maybe starting with Spiked. Maybe just talk a little bit about how that idea came to fruition and just your experience so far with Diageo as a partner?

Yes. So for a couple of years now, I've been -- I saw in Brazil first hand all the usage occasions for coconut water. It's not only Brazil, it's anywhere in the tropics. People drink at breakfast and they mix it with their cocktails at night and everything in between. That wasn't happening in the U.S. And so I've been wanting to create a ready-to-drink alcohol-based coconut water for a long time. But I didn't have the time, energy or resources to go build that distribution network, to add the sales organization against it and all of these -- and build CapEx and all these other things that I would have needed to do. So about 1.5 years ago, I went to Diageo and I brought them this idea of creating a ready-to-drink cocktail. And they loved it, and Diageo is a beast. And I think they typically, like any large company, move somewhat slowly. They crushed this. I mean they loved the concept. We put the idea together. We chose the brand with Captain Morgan. They chose it for some reasons. We chose it for others. I think it's a perfect fit. And they -- it's a licensing deal. So we don't have to invest in the CapEx. We don't have to invest in the marketing. None of the pre-revenue investments that we would have to make, yet it's going to be a nice revenue stream for us through the royalty. And they are a beast. I mean, like I could never have gotten the type of distribution in a month now. It's been like 1.5 months. I walked across the street last night to this liquor store. It looks great in that little liquor store. The guy says it's selling really well. It's in Walmart. It's in Kroger. They're able to just push. And so we think it's a very unique partnership for us as, I will say, a small company to partner with such a large company in such a synergistic way.

Does it open the door for other alcohol related to whether it's mixers or other cocktails? Just is this just kind of the opening bid, if you will, and there's room for more expansion?

Absolutely. That's what I was saying. I think this gives us the ability to start to show up in new places to new consumers. We were never in that liquor store across the street before, and we never would have been. We were never in Walmart liquors. We were never in these type of places, ABC and Total Wine and Spirit. So now we're there, so we're getting seen more. At the same time, coconut water will be -- I know I'm supposed to not make forward-looking statements. But I believe that coconut water will play a significant part in cocktail mixing well into the future. And I believe that Vita Coco, which is sold in almost every corner store, grocery store, bodega around the country and is not in any bars or restaurants or clubs, has a whole new distribution opportunity in its format, the tetra pack, pure coconut water, in on-premise as a cocktail mixer. And I think this is just the beginning of getting people to think about mixing coconut water in their cocktails.

And that education is, I guess, helped by Diageo. It's educating bartenders and staff like there's a whole education process that goes with that.

Yes. And that's going to be one of the places we invest some of this incremental margin in the next couple of years.

And then maybe if we can spend a few minutes on coconut milk. I know last week, you and I were talking a little bit about just how coconut milk is really beginning to emerge, right, cream in coffee. So maybe if you can kind of just talk a little bit about what you see as the path forward for coconut milk?

Yes. Obviously, everybody knows dairy alts are now playing a big role in the coffee business and throughout consumer. I was in a coffee shop recently with my daughter and she ordered a hot chocolate with regular milk. This is a busy coffee shop. They're making cappuccino after cappuccino after cappuccino. They had to go find the regular milk. They couldn't find it. That's how -- this was in the Hamptons, right? So it's like that's how fast things have changed. And so oat has taken off, almond before it, soy before that. Coconut milk, our product is super clean ingredients. It's super simple. It mixes well with coffee. We launched it, I think, 1 year, 1.5 years ago in Walmart and other retailers in the shelf-stable dairy alt set. It's outperforming the largest player in the coconut milk set in the stores that it's in and growing that category. We also did a partnership with Alfred, which is a super-premium coffee shop chain on the West Coast, and it's doing really well there. And then from there, we'll be -- that's our barista blend that will now be launching in other premium coffee shops around the country.

And if we think about -- there's other applications, coconut milk as a base for making smoothies. And so there's certainly like runway there as well. But dumb question, but like does coconut milk comes from the same place that coconut water comes from? Like once it's cracked, right, how do you separate the milk from the water?

So the water -- so the coconut milk that you would buy is a blend of coconut water, coconut cream, which is the meat that is then processed into a cream and water. And that's basically how you make the coconut milk that you would see that we would sell on the shelf. So it's water, coconut water and coconut cream.

Right. And so that's all sourced from the same coconut, same location, same process.

Yes.

It's kind of on the same page. But when you look at other dairy alternatives like oat milk, et cetera, a lot of those companies have struggled with just capacity and like just their manufacturing. So my question for you, it seems like this is a pretty seamless process relative to coconut water. Do you -- so do you foresee any bottlenecks down if the category explodes on the milk side from a demand perspective?

No, because it is being produced on the same lines as the coconut water from the same coconuts. And I think somebody asked this question today, you've got to remember, the water was a byproduct. The coconuts are coming through the facilities. We're using about 3 million coconuts a day to supply our coconut water business. And we have access to a lot more coconuts than that. So the access to coconuts is not the issue. And I think one of the beauties of our business compared to some of these other businesses that you're thinking, we don't have the CapEx issues that they have. It's an asset-light model. We've partnered with great partners. They invest in the assets for us. We tell them what we need and when we need it and they invest in the assets. And so this -- our CapEx is like the computers in the office and a couple of vehicles like -- that's it. It's a really nice business model, which allows us to generate significant cash. We have no debt on the business. We're just building cash reserves.

And then as we think about educating consumers about coconut milk. Again, you're kind of a category. So it's -- so is there -- there's -- is it messaging on health, the attributes of coconut milk maybe versus some of the alts? Just how are you going to go about getting consumers -- raising consumer awareness?

It's clean ingredient list. It's the ingredient label. I was drinking oat milk for a while and it's good. It's great in coffee. It's great for Cappuccino, but I turn the ingredient label over and it's complicated. It is. It is. And I think that's the big difference. This is super clean.

And there's also less bloating, right? So a lot of those -- all of the alt milks tend to have a bloating component to it. And with coconut milk, that's not an issue.

Yes.

Okay. So maybe if we can turn next to PWR LIFT. Again, a natural sort of adjacency, right, given the hydration sort of credentials that you have in coconut water. So if you can kind of give us some insight in terms of where you stand now in terms of the development of PWR LIFT and kind of what the opportunity is there?

Yes. I've been thinking about -- as I think about the beverage space, you've seen energy drinks really fragment in the last several years. Red Bull owned it till Monster came, then Red Bull and Monster owned it with a little bit of Rockstar for years. And then it's really started to fragment over the last 3, 4, 5 years and you're seeing new consumers coming into that category for new reasons. And I think isotonics is at a similar point in its life cycle as a category. Gatorade owned it forever. BODYARMOR started to crack that ownership a little bit. And now I think it's at a point where it's really going to fragment and I think offering something unique and different within that large beverage category gives us something really interesting to work with. So we partnered with our largest distributor, Keurig Dr Pepper, to launch this product in Texas this year. We launched it a few months ago with all the major retailers with KDP against it and KDP is really powerful in Texas. And so they're doing a great job on distribution. We have a dedicated execution team against it putting significant dollars, especially when you think of the regional level, significant marketing dollars against it. And we're going to test and iterate. And if we get it right, the initial signs looked really good, I think over the next 3 to 5 years, we should be a real player in the isotonic space. Now there's no coconut water in it. It's a totally different product. It is a really chuggable protein drink. So it's zero sugar, drinks like a Gatorade and has 10 grams of protein. So again, not only sourcing from just sport drink consumers, we're also sourcing from protein shake consumers who want something more chuggable and drinkable. So we think it's a pretty uniquely positioned product.

And you're how far into testing now, like how long this has been in the market?

So we did Arizona last year, very small, to test it out and get the product right. And then we launched Texas in the end of December.

Okay. Okay. Maybe if we flip towards distribution, since you mentioned Keurig Dr Pepper, you have a bit of a hybrid, right? Some product goes to market or it goes to retail or warehouse, some goes direct store distribution. So maybe if you could talk a little bit about how you see your distribution network may be evolving over time.

Yes. So we talk about it. I think we try to get to retail the best way for the retailer. And so in the large club stores, we go direct. It's just easier, it's better for everybody. And then for typically grocery and C-store and drug, it's mostly through KDP and our other distributors. And now that we're starting to build the on-premise business, forget Southern Wine and Spirits, nobody else is doing the Diageo product, but we're now really building out our foodservice business with Cisco and those type of guys who go to foodservice accounts. And that's going to become a larger and larger piece of our business, too. So we now have a 3-way kind of hybrid distribution network that we manage between broadliners, KDP and the DSDs and our direct business.

Okay. And how do you manage having that they don't step over each other?

So licensed accounts goes through one. So the food -- licensed foodservice accounts goes through the broadliners, natural specialty goes through broadliners and then it's by channel after that. It's club goes direct and the rest is DSD.

Maybe if we talk a little bit about financial goals and you've got a mid-teens revenue growth target over time. You've got a goal to be at high-teens EBITDA margin, if I remember correctly. So maybe the building blocks to sort of get there over time, again, not talking about this year or short term, but just kind of what are the pieces that you see that kind of will build that out over time?

Well, I think if you think about top line, it's branded growth. And we talk about the -- it's branded growth of the core business. So I love PWR LIFT. It's doing really well. It's not even part of that plan. Milk is not really even part of that plan. This is just growing our current core business. Vita Coco branded business will continue to drive the growth. In that plan, Vita Coco branded business grew high teens last year, almost 20%. We think that, that growth continues. Private label business, which is a really good business, will continue to grow. But because the branded is growing so fast, it's becoming less and less a percentage of our business, therefore, there's a very positive margin mix shift because obviously private label is lower margin than branded and that helps with the EBITDA. And then obviously, just the correction in the costs, which is happening like now, over the next 18 to 24 months and will roll out during that time period, has, I think, the largest impact on EBITDA. And then just revenue growth. So if we think about it, we're already -- the growth is close to that. The branded business is actually exceeding that. And then on EBITDA, we're already, this year, getting into the low teens. And we feel that as the logistics and everything else starts to come back, we feel that getting to the high teens is not in the far distant future.

So incremental to those targets would be PWR LIFT. And would that also include Spiked?

Yes, that's not in the plan.

So it's like you think about the lanes that you're kind of lining up then, right, whether it's premix cocktails, mixers, protein drinks, right? Like big categories, growing categories, and all of that would be incremental to what your sort of plans are?

That's right. We feel we've got a lot of really solid lines in the water, really great growth initiatives that can continue to grow the business. And I think -- I mean we think there's upside to our plan now.

And then maybe this gets back to the discussion earlier about the organization and some of the people you brought in. Do you feel like you have the resources to sort of beat all those lines that are in the water, if you will?

Yes. I think if we had all the lines in the water that we have now a year or 2 years ago, we wouldn't have been able to. But like I said, we're on offense because we've got the capital now. I think we've got the team, we've got the organization. Going public was a big undertaking for a small company like ours. We had to get the finance team in order. We just -- our CFO started 3 days ago, but he's -- he comes from within the industry. He's a Pepsi guy who really understands our business. I think with that addition now, I think we are really set up to just build off this business.

And then as we think about M&A. And I think when we first -- when I was first introduced to you, there was some discussion about acquisitions, maybe even part of the platform. Listening to this, it sounds like it's not really that important, but just how you think about acquisitions and M&A, again, kind of going forward?

I think M&A will play a role. I think -- I really believe that we can be a significant player in the broader beverage -- non-alc beverage space. Look, we're not going to do anything stupid. I think we've got enough good things going. We don't need M&A to grow, but we're starting to generate significant capital and cash. And so for a growth business, the question becomes at what stage do you give that cash back to shareholders? Or do you further accelerate growth? And does M&A become a part of the model? And I would think the value expectations in this industry are changing as capital -- as private equity capital kind of dries up and the public market window is kind of shut for businesses that aren't cash generative and so on and so forth. It puts us in a really unique position as a potential acquirer in the non-alc beverage space.

So do you have people dedicated to looking at M&A currently? It's you [indiscernible] classified. Yes, I mean it's -- and I guess as you think about that, right, in terms of the stress or the pressures that are on a lot of smaller companies, are you starting to see more people maybe knock on the door or want to have discussions?

Absolutely. It's an interesting time. I mean this is a category that 10 years ago, it was you create a brand, you grow it to $40 million and you sell it to Coke or Pepsi, that's it -- or KDP. That was it, right? The strategics aren't buying right now. They're focused on their core and the private equity capital that was just flowing into these businesses at crazy multiples is drying up. And these businesses don't have the scale. The beverage industry is an industry of scale. You need scale to get scale. And so I'm not going to say we're a massive player in the category, but we've got enough scale that we can execute, and that puts us in a pretty unique position in this, at least in better-for-you beverage space.

Any other questions in the room? All right. Mike, I'm going to wrap it here. I want to thank you very much for coming down and spending time with us today. I think the theme here is you're on offense. We look forward to catching up. Thanks.

Thanks, everybody.